Notes:MENA refers to “Middle East and North Africa“. The population is some 381 million equal to 6% of the total world population, if we consider all the countries included commonly. Obviously, Petroleum is the major industry,.

6. If the government chooses to spend money freshly printed by the RBI against government securities, it should be kept in which among the following?

Notes:The Reserve Bank uses various policy levers, such as repo rate, reverse repo rate, cash reserve ratio, statutory liquidity ratio and bank rate, to influence the amount of money in the market. An increase in any one of these could raise the interest rates.

sumita

sridhar

HIM

Hello sir.
I’ve some doubt in the question no. 5.
How can the increase in the ‘Reverse Repo Rate’ can cause an increase in the interest rates of banks, because a ‘Reverse repo Rate’ is the rate at which the central bank borrows short term loans from banks.So if this rate is increased , then the money with the commercial banks should increase, same way their interest rates should decrase.